IFM EXAM1 -Madura - IFM -Madura Multiple Choice Identify...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
IFM -Madura Multiple Choice Identify the letter of the choice that best completes the statement or answers the question. ____ 1. Which of the following theories identifies specialization as a reason for international business? a. theory of comparative advantage. b. imperfect markets theory. c. product cycle theory. d. none of the above. ____ 2. A product cycle is the process by which a firm provides a specialized sales or service strategy, support assistance, and possibly an initial investment in the franchise in exchange for periodic fees. a. true. b. false. ____ 3. Which of the following is not a provision or result of the Single European Act of 1987? a. increased regulatory uniformity among European countries. b. the phasing in of a common currency for all European countries by 1992. c. the removal of many taxes on goods traded between European countries. d. firms' ability to achieve economies of scale. e. all of the above. ____ 4. Which of the following is not mentioned in the text as an additional risk resulting from international business? a. exchange rate fluctuations. b. political risk. c. interest rate risk. d. exposure to foreign economies. ____ 5. Due to the larger opportunity set of funding sources around the world from which an MNC can choose, an MNC may be able to obtain capital at a lower cost than a purely domestic firm. a. true. b. false. ____ 6. Although MNCs may need to convert currencies occasionally, they do not face any exchange rate risk, as exchange rates are stable over time. a. true. b. false. ____ 7. If the home currency begins to appreciate against other currencies, this should ____________ the current account balance, other things equal (assume that substitutes are readily available in the countries, and that the prices charged by firms remain the same). a. increase b. have no impact on c. reduce d. all of the above are equally possible ____ 8. According to the text, international trade (exports plus imports combined) as a percentage of GDP is: a. higher in the U.S. than in European countries. b. lower in the U.S. than in European countries. c. higher in the U.S. than in about half the European countries, and lower in the U.S. than the others. d. about the same in the U.S. as in European countries.
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
____ 9. Like the International Monetary Fund (IMF), the _______________ is composed of a collection of nations as members. However, unlike the IMF, it uses the private rather than the government sector to achieve its objectives. a. World Bank b. International Financial Corporation (IFC) c. World Trade Organization (WTO) d. International Development Association (IDA) e. Bank for International Settlements (BIS) ____ 10. A weakening of the U.S. dollar with respect to the British pound would likely reduce the U.S. exports to Britain and increase U.S. imports from Britain. a.
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 17

IFM EXAM1 -Madura - IFM -Madura Multiple Choice Identify...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online